Summary

In November 2012, the China Association of Automotive Manufacturers (CAAM) revised its 2012 forecast for vehicle production and sales downward by 1 million units from about 20 million units (including about 16.1 million passenger cars), which it had announced at the beginning of 2012, to about 19 million units. China Automobile Trading Co., Ltd., the largest state-run imported car dealer, announced that it had also revised down the 2012 forecast for imported car sales from the original of more than 1 million units to about 970,000 units (further down by 10% year-on-year in 2013).

This is because the sales of Japanese cars fell substantially during the high season from September to October (There is a Chinese phrase "Gold September and Sliver October") due to the slumping consumption caused by the slowdown of the economy and the effect of anti-Japan demonstrations over the territorial issue between Japan and China.

According to the press releases by each OEM announced by November 2012 and the original survey by MarkLines, amid the continuing adverse effect of anti-Japan demonstrations, eight Japanese OEMs including Toyota, Nissan, and Honda revised their 2012 sales target downward by 650,000 units. Yet, they have not changed their medium-term plan in which they will boost production capacity in China from the current level of around 4.2 million units a year to about 6 million units in 2015, and to a further 7.4 million units in 2017.

In the meantime, leveraging the rapid fall of Japanese car sales, Chinese cars (including some models based on foreign models under a Chinese brand) and European models have been increasing sales substantially. When we look at the change of the monthly sales share in 2012 by major brands, the average share of Japanese cars dropped sharply from 19.5% between January and August to 10.3% between September and October, when anti-Japan demonstrations occurred (Appendix Table 3: Monthly sales share of passenger cars in 2011/2012 on a factory shipment/wholesale basis). This 9.2 percentage points decline by Japanese cars in September-October are replaced by the 3.4 percentage points of Chinese cars, which is the largest, followed by the 2.6 percentage points of European models, and 1.6 percentage points each from Korean cars and US models.

According to the survey conducted for people involved in the automotive industry in October and November 2012 by Gasgoo, a China-based automotive research firm, many think that the improvement of Japan-China relations is an important factor for the recovery of demand for Japanese cars in China. If Japan-China relations do not worsen but improve, the adverse effect on Japanese car sales will remain as it is until March 2013 and sales are expected to improve thereafter. According to the preliminary report on vehicle sales in China in November 2012, Toyota sold 63,800 units (down 22.1% year-on-year), Nissan 79,500 units (down 29.8%), Honda 41,200 units (down 29.2%), and Mazda 12,200 (down 29.7%); the rate of decline was shrunk compared to that in September and October.

The following summarizes the recent sales of Japanese cars in China, business plans in China by eight Japanese OEMs and the future sales of Japanese cars based on the survey in China. In addition, for reference, we also provide information on the latest business plans in China by the competitors of Japanese cars - VW, GM, and Hyundai/Kia and sales rankings of passenger cars in China by model between January and August, and September and October, 2012.

(Note) In the data of this report, Japanese cars, US cars, European cars, and Korean cars are models marketed in China as foreign brands, and original brands of joint ventures in China (for example: Dongfeng Nissan Passenger Vehicle's Venucia brand). However, foreign models marketed under Chinese brand (for example: the Xenia under FAW brand) are classified as Chinese models.